Palm Foleo: What were they thinking?

Wolfgang Gruener, 31st May 2007

We see a lot of new hardware and software that often leaves us scratching our head what the purpose and market opportunity of that new product could be. Palm set high expectations with a new mobile device that was announced to describe a new mobile category – and Foleo left us speechless. Palm can’t be serious about this one.

Jeff Hawkins is without doubt one of the smartest guys in Silicon Valley. It is largely because of his vision that the PDA category was created in the second half of the 1990s; he brought us the first the first tablet-PC like device in the late 1980s; he was the first one to commercialize a smartphone in the form factor we are used to today and he continues to help Palm define a direction in a market that gets more competitive every day.

When Palm told us yesterday that Jeff Hawkins was about to announce a new mobile device in a category we weren’t aware of until today, of course we made sure that we wouldn’t miss the webcast presentation. And since Hawkins turns 50 on June 1, we expected something big. Kinda like a birthday present that he would give to himself. And boy, what a present that was. We believe that there is a good chance that he won’t forget this one anytime soon.

This new product, called Foleo, turns out to be something that looks like a small laptop computer, but it doesn’t act like one. In fact, its functionality is much closer to that of a smartphone, but you can’t use it to make calls. So what is it?

It is an extension to the smartphone, a device that enables Palm to pitch to you two $500 products instead of only one. Hawkins said that Foleo is light, it feels good in your hand and it has a large keyboard and 10” screen that come in handy when you want to view those pictures, PDF or Powerpoint attachments and write emails that are longer than just ten words – which admittedly is a painful task on today’s smartphones.

So there really is an interesting thought in this and it has some unique features, such as the instant on/off, but $500 for a large screen and keyboard for your cellphone? For a device that can’t do anything by itself (well, ok, you can browse the web and send/receive emails, if there’s a Wi-Fi connection close by), and a device that you would have to bring along on your business trips in addition to your cellphone, your laptop and your iPod?

I somewhat have the feeling that Palm will need a small miracle to turn the Foleo into commercial success. But let’s just imagine for a moment that this category does succeed: What else could follow? Apple could create a video iPod companion. A $300 portable, DVD-player-like device without the capability to play DVDs, but to stream videos from the iPod via Wi-Fi (I still hope that we will see this feature in iPods this year) or from a Compact Flash card. Would you buy such a product? I am not so sure.

Hawkins believes that there is a substantial market opportunity for Foleo, as - according to a market survey - 24.2 million people use their smartphones to send and receive emails. But realistically, not all of those users have Palm OS and Windows Mobile devices. There are many users who have Blackberrys, Symbian-based phones and the future will bring lots of people using iPhones – all of which will not be supported by the first version of the Foleo. Take all of those people out of the equation and then subtract from that all those people who have Treos and Windows PDA phones and do not need notebooks during their business trips. Suddenly that market does not look quite as big anymore.

The software side is another problem area for the Foleo. Beyond email and web browsing, there isn’t really anything the device can do. And even web browsing is somewhat limited, as the device isn’t strong enough to play YouTube videos, we were told. Some other applications are there as well, but according to Hawkins, software such as an image viewer was thrown in because the application apparently was created more or less by accident by someone on the side and not necessarily with the Foleo in mind. Foleo could benefit from unique applications, but it is exactly this area that appears to have no direction. The hopes are on a developer community that Palm hopes will grow around Foleo. Will that be enough? Gee guys, why doesn’t Foleo have a VoIP application built in to make Wi-Fi calls?

The good thing about the device is that we don’t know too much about its specifications yet and Palm has time to revise the product. For $500, a large keyboard and a large screen are not enough. Even a processor that can handle video playback, reasonable flash storage, GPS capability and battery life of more five hours would make Foleo look like a risky business proposition.

But then, we all may be wrong and Hawkins will be able to once again turn his vision into a successful product. We just aren’t convinced yet.

What do you think? Would you buy the Foleo? How would you use it? Let us know and write a comment in the form below.